Thursday, November 18, 2010

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When Senator Dianne Feinstein called Jerry Brown last winter to tell him she’d decided not to run for governor, he replied with a one-liner: “That’s too bad,” he reportedly said. “I was hoping you’d run so I wouldn’t have to.”

Speaking as a candidate, Attorney General Brown doubtless meant the comment to his fellow Democrat as a joke. Now California’s governor-elect, however, Brown doesn’t have so much to laugh about.

Capitol Letters

Returning from a brief post-election vacation, he was greeted by a report from the nonpartisan Legislative Analyst’s Office showing the state now faces a $25.4-billion deficit. About $6 billion is in the current $86-billion smoke-and-mirrors budget for the fiscal year ending June 30, 2011, which Governor Schwarzenegger signed only one month ago; another $19 billion looms for the following fiscal year.

Noting that the “painfully slow recovery” of California’s economy will keep depressing tax revenues for at least several more years, Legislative Analyst Mac Taylor forecasted that fixing the problem will require “unavoidably painful sacrifice.”

“The Legislature and the new Governor will be tempted … to continue patching over the budget problems with temporary fixes,” Taylor said bluntly. “Unless plans are put in place to begin tackling the ongoing budget problem, it will continue to be difficult for the state to address fundamental public sector goals — such as rebuilding aging infrastructure, addressing massive retirement liabilities, maintaining service levels of high-priority government programs, and improving the state’s tax system.”

Not since the Fifth Labor of Hercules, when another son of a famous political family was assigned to muck out the dung produced by a herd of immortal cows, has a public figure faced such a daunting task as Brown. Even in a state familiar with chronic deficits — and with chronic, gimmick-laden “solutions” to them — the new figures shocked Capitol denizens.

Last week, Schwarzenegger called an emergency legislative session on the deficit. Having come to office promising to “end crazy deficit spending,” the incumbent is about to depart having utterly failed at doing so and is bereft of political capital; with majority legislative Democrats awaiting Brown’s January inauguration, the Terminator’s move will likely have as much effect as publishing poetry.

During his campaign, Brown made few proposals to stem the red-ink flow, beyond a fuzzy promise to convene bipartisan kumbaya meetings, where sweet reason will allegedly replace the bitter ideological gridlock that grips Sacramento. Good luck with that.

As a practical matter, Brown will begin his term with policy options that are straitjacketed, both by a host of long-standing restrictions imposed by initiatives — like the Proposition 98 school-finance formula and many other voter-approved measures — and by more recent developments:

STIMULUS: The flow of billions in federal stimulus dollars, which helped Schwarzenegger paper over recent shortfalls, has ended. About $2 billion of the current $6-billion deficit results from magical thinking the governor and lawmakers used to craft the one-month-old budget, overestimating the cash they said the feds owed California; with the end of the stimulus, and Republicans now in charge of the House of Representatives, that bank window has closed, probably for good.

INITIATIVES: At first glance, voter approval of Proposition 25, allowing a budget to pass with a majority vote instead of two-thirds, makes the process easier. But voters also imposed new restrictions by simultaneously approving Propositions 22, 24, and 26, which, variously, outlaw several new corporate taxes while preventing Sacramento from tapping local government redevelopment and gas tax money, two revenue sources upon which recent budgets relied.

TAXES: Budget analyst Taylor said that policymakers “are going to have to look at revenues; they are going to have to look at taxes” for a long-term solution to the financial mess. But politically, such a step remains a near-impossibility: Despite Proposition 25, the two-thirds vote rule remains in effect to pass new taxes, and Republicans quickly made clear they won’t cast the votes needed for that.

For most Californians, the deficit will be visible most clearly in the schools. K-12 education statewide received a boost of about $4 billion last year from stimulus money and temporary state tax increases: With both dried up, the bottom-line base of funding for education will be reduced by $4 billion — even before deliberations over the new deficit start — leaving schools vulnerable to even further cuts.

“This will take all the know-how that I said I had,” Brown said the day after election, “and all the luck of the Irish as I go forward.”

Comments

For the record, I'm a Republican that never voted for that RINO Schwarzenegger-nor did I vote for any of the bond measures he promoted. Ppl need to realize that those bonds (if they even get purchased) are loans that will need to be paid off eventually--not Fairy money. I ask, would you run up a deferred payment credit card w/your kids liable for the payment, just so they could have a few improvements on their school building or other community projects? It's the same thing in this near-bankrupt economy. I am ashamed at the number of bond measures that have passed in my lifetime. I can only hope smart investors will pass on investing in CA so we can learn to stop wasting tax dollars for a change.